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News analysis: Free speech issue stymies don't-call list

What to do next in the do-not-call fight presents a high-stakes question for the ad industry: How closely to ally with telemarketing's battle to defeat government rules.

After court orders to halt the program and an overwhelming, bipartisan effort by Congress and President Bush to rescue it, the do-not-call rules for telemarketing got under way Oct. 1 despite legal uncertainties.

But the ante was raised dramatically after a U.S. district court judge in Denver, in a suit brought by the American Teleservices Association, ruled that the list was a violation of the First Amendment. The judge held it was impermissible to bar unwanted calls by business while exempting those from political fund-raisers, charities and pollsters.

different dynamics

"Are there now threats [in the do-not-call fight] to the larger ad community? The answer is yes," said Washington advertising and marketing attorney John Kamp. "The courts over the last 25 years have given commercial speech more and more protection. Congress now has a lot of incentive [in order to save the do-not-call program] to separate commercial speech from political speech, and the distinction could eventually erode the protection."

As a First Amendment commercial speech issue, ad industry groups would normally jump into the fray. But the dynamics are much different this time.

The federal do-not-call program has crystallized a grass-roots revolt against a form of selling, telemarketing, that is broader and deeper than any directed at traditional media advertising in many years-and maybe ever. Are advertisers, agencies (many with sizable direct-marketing units) and newspapers and magazines (which sell subscriptions by phone) ready to put commercial-speech restrictions at risk defending their "right" to place unwanted telephone sales calls?

"We would fight any proposal to treat other advertising in the same manner," said American Advertising Federation President Wally Snyder. But the flap over unwanted telemarketing calls represents "an extraordinary situation," he said, "where you have individuals going on the record registering their desire not to receive these calls." By comparison, he said, "media advertising is accepted. It is understood that consumers don't have to pay attention to it."

"This is an unusual case," agreed Dick O'Brien, exec VP-director of government affairs for the American Association of Advertising Agencies. "Our industry has a long tradition of defending the First Amendment in virtually any incarnation. But in this instance, 51 million American have said that they do not want to be called at home. We now need to define the borders between our belief in the First Amendment and our belief in the public's right to privacy. "

"The fact that the public has shown such great concern about this area," said Dan Jaffe, Washington-based exec VP for the Association of National Advertisers, "means it is important that the advertising community work to find a response that balances protection of the First Amendment and consumers' interests. "

The Direct Marketing Association, while renewing objections to parts of the federal program in testimony to Congress last week, assured lawmakers it understood consumer wishes need to be respected. It repeated that DMA members have been asked to voluntarily not place calls to the 51 million phone numbers registered with the Federal Trade Commission.

"Government should not have been allowed to make that judgement for consumers in advance-that one type of speech is worse than another," said New York University law professor Burt Neuborne, an expert in commercial-speech law. But "the political question is different than the legal one," he added. "Why would ad associations want to ally themselves with something so plainly in the bull's-eye for Congress and the public?"